basis, it does identify the total number of proposed plans and post-award reviews it made to determine prime contractor compliance with approved subcontracting plans. Of the 12,251 proposed subcontracting plans and 13,658 post-award reviews conducted by the SBA in fiscal years 1981 and 1982, only 107 Navy plans were identified as needing improvement because, in the opinion of the SBA, they did not contain maximum practicable opportunities for small businesses to participate in the performance of the prime contracts. Some of these plans were improved as recommended by the SBA, and the SBA report indicates that some contracting officers may have failed to apprise SBA of final contract actions prior to the end of the SBA reporting period for purposes of their annual reports. For example, the Navy's analysis of the 35 plans identified by the SBA in fiscal year 1982 found that in most cases either the SBA ultimately concurred in the plan or the contracting officer was unable to identify any recommendation calling for improvement. I am aware of

no instance in which a Navy prime was ultimately in non-compliance necessitating remedial actions including debarment proceedings.

Subcontract data is compiled and transmitted to the Office of the Secretary of Defense by the DoD component that has contract administration cognizance. For example, a significant number of the Navy's contracts are administered by the other Services, particularly the Defense Logistics Agency, and these contract administration offices compile and transmit subcontract data direct to OSD for Navy primes. Conversely, Navy contract administration offices report subcontract data for prime contractors when the Navy has cognizance of the facility. Therefore, I cannot identify the total dollar value of all subcontracts awarded under Navy prime contracts containing plans, including the percent and dollar value to small and small disadvantaged businesses. Table 1 provides information with respect to all DOD contracts

containing plans for which the Navy had contract administration cognizance. Note that the prime contractors consistently increased their dollar awards to both small and small disadvantaged business firms during the last three years even though the goal was not achieved during two of those years. My opinion as to why the goals were not met are twofold. First, economic conditions caused primes to retain in-house, work that was formerly subcontracted out to small businesses because they were trying to retain their own employees. Second, we were ambitious in our 1982 goal based on 1981 performance. The establishment of realistic goals and the achievement of those assigned continues to be the Navy's intent.

Another problem with data collection involves the total number and dollar value of Navy prime contracts awarded in which the performance against the goals recited in the plans are measured. These data are not computer

captured. However, such subcontract data on completed DoD contracts for which the Navy had contract administration cognizance is reported by the primes and is centrally compiled and published by the Office of the Secretary of Defense. A summary of such data for the Navy is set forth in Table 2.

When considering all completed contracts in fiscal year's 1981, 1982 and 1983, including both those which did and did not meet goals, the primes that the Navy administered had average goal attainments for small business subcontracts of 124.7, 141.1 and 116.6 percents, respectively.

For small

disadvantaged business subcontracts, they had average goal attainments of 196.3, 142.2 and 186.7 percents, respectively. This illustrates that overall the primes are achieving and surpassing their established goals.

In summary, Public Law 95-507 as implemented within the Navy, has fostered

the development of maximum practicable opportunities for small business to participate in the performance of prime contracts. It has helped ensure continuous increases in subcontract awards to small businesses. The Navy's implementation has not been without cost or the expenditure of time by the contracting workforce. I believe there are ways that the administrative effort can be reduced, and at the same time, we can enhance the effectiveness of the subcontracting program. My suggestions for improving the program are:

First, I believe we could be more successful in achieving our purpose by negotiating and approving master subcontracting plans with goals on a corporate, company, or subdivision basis rather than the individual subcontract plans currently required. By eliminating the subcontracting plans for the thousands of individual Federal contracts awarded each year, more effort could be devoted by both the government and the prime contractor to ensuring compliance and monitoring effectiveness. The master plans should be approved by the cognizant contract administration office and reviewed by the Small Business Administration since these two entities already have the responsibility for monitoring, evaluating, and documenting a contractor's performance, and have the "corporate" knowledge and experience to know if the contractor is satisfactorily carrying out the subcontract provisions of a particular prime's contract. Further, they are in a better position to take corrective action, if necessary, and have better leverage in achieving the desired results than if the responsibility remains fragmented among the Department's contracting officers.

Second, the term for these master subcontracting plans could be extended to cover a period of up to 3 years as determined on a case-by-case basis, reducing the burden created by annual renegotiation of these plans for those

contractors whose line of work does not significantly change over time or who demonstrate a solid record of continuously improving performance.

In closing, Mr. Chairman I believe the Public Law 95-507 is good for small business and for the Navy. I also believe that if we refocus our efforts based on our experiences, and take actions as outlined above, we can and will do even better. Finally, let me assure you and members of your Committee that the Navy is and will continue to be active in its support of the Small Business Program.

I would be pleased to answer any questions that you may have.

Thank you.'